The FTSE is bouncing higher from the key 6070 support level which represents the October 2014 low alongside the ascending trendline dating back to late August. Unlike the DAX, this chart appears to be turning higher from a level above the 15 September swing low, and this makes the overall direction harder to ascertain. However, for now it is worth watching for the day’s direction, which while initially very bullish, is likely to find resistance around 6142. An intraday close above 6142 would bring a bullish outlook for a move back towards 6200.

DAX continues to struggle amid major bearish signals

The DAX selloff from late last week has continued once more this morning, with initial upside being sold into. The early September low of 9864 was a likely source of support, yet the price has passed through it in early trading. Given the inability to hold on to those early gains, I expect further downside for as long as the index continues to create lows and lower highs.

Thus I am bearish while the price remains below 9918. However, given the more bullish look on the FTSE and Dow Jones, alongside the fact that the DAX will have been hit significantly by the Volkswagen share price in particular, there is a good possibility that bullish signals could start to come back into play soon for some form of retracement higher.

Dow showing tentative gains following selloff

The Dow is finally showing some signs of a recovery, with the price starting to turn higher following a strong selloff through Friday. The momentum indicators are pointing towards a possible bullish resurgence, while the stochastic turns higher, with the MACD doing something similar. The 20-hour SMA is a clear resistance to contend with on pure price action, and we still remain within a short-term downtrend. For me to become confident of a bullish move higher I would need to see an intraday close above 16,450. Until that happens, I am more neutral given the continued creation of higher highs and higher lows on the daily timeframe.